More Upside Expected for U.S. Auto Sales as Recovery Takes Hold
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General Motors (NYSE: GM), Ford (NYSE: F), and Toyota (NYSE: TM) have reported strong U.S. retail sales in recent months and it doesn't look like the gains are going to stop anytime soon.
Bloomberg said it recently conducted a poll and found the economists expected continued growth in the auto segment to an adjusted annualized pace of 16.1 million units next year, up 500,000 units over expected sales in 2013. That would mark the fifth-straight year of gains for the industry and will be within throwing distance of a record 16.15 million in sales hit in 2007.
The last five-year streak of gains was 1996 to 2000 as the Detroit-based auto makers and Toyota all saw strong demand in SUVs and pickup trucks.
This time around, following the financial meltdown and fallout in 2008 - 09, the automakers have trimmed costs and are turning profits, versus losing money amid record sales like they were in the 2000s.
One analyst from AlixPartners said that the natural midpoint is about 16 million per year.
Production capacity from 2010 through 2015 is also expected to increase 3.5 million units, according to Morgan Stanley. Despite garnering record-high prices on autos, pricing discipline will be key moving forward as competition stiffens. The firm thinks the U.S. auto sector could see sales hit an annual pace of 18 million units before any pullback, though a time frame on the estimate wasn't given.
Shares of GM, Ford, and Toyota are indicated higher early Monday.
Bloomberg said it recently conducted a poll and found the economists expected continued growth in the auto segment to an adjusted annualized pace of 16.1 million units next year, up 500,000 units over expected sales in 2013. That would mark the fifth-straight year of gains for the industry and will be within throwing distance of a record 16.15 million in sales hit in 2007.
The last five-year streak of gains was 1996 to 2000 as the Detroit-based auto makers and Toyota all saw strong demand in SUVs and pickup trucks.
This time around, following the financial meltdown and fallout in 2008 - 09, the automakers have trimmed costs and are turning profits, versus losing money amid record sales like they were in the 2000s.
One analyst from AlixPartners said that the natural midpoint is about 16 million per year.
Production capacity from 2010 through 2015 is also expected to increase 3.5 million units, according to Morgan Stanley. Despite garnering record-high prices on autos, pricing discipline will be key moving forward as competition stiffens. The firm thinks the U.S. auto sector could see sales hit an annual pace of 18 million units before any pullback, though a time frame on the estimate wasn't given.
Shares of GM, Ford, and Toyota are indicated higher early Monday.
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